Launching a startup in the 21st century is something other than rocket science. However, launching a successful startup that moves beyond the critical survival stage is more challenging than most people think. There are unlimited ways and strategies that you can approach during the initial stages. However, you can fail in a million ways before getting it right.
One of the most significant issues many entrepreneurs face is the need for more resources. When growing a startup, the available budget often distinguishes between success and failure.
Since you're reading this post, you're looking for alternative ways to collect and leverage the necessary funds to ensure proper growth and stability.
'Let’s explore the main benefits and disadvantages of landing a sponsorship deal for your startup and define the best strategies and approaches to suit your unique business needs.
The PROs of Sponsorships
Sponsorships provide multiple benefits to both companies and sponsors. Here are the main advantages that you'll gain through a sponsorship deal:Brand awareness and reputation
Sponsorships can benefit your startup in terms of brand awareness and recognition. If you are getting sponsored by a reputable brand within your industry, your company's name will be directly associated with the organization that you're collaborating with. Perceive it as a relevant union that benefits both you and the sponsor.Exclusivity
Manage to negotiate an exclusive deal with your sponsor. You'll be able to create a win-win situation that generates positive recognition, demand, and excitement in terms of deals and sales.Flexibility
Landing a sponsorship deal for your startup will presume specific terms and conditions that both you and your sponsor must respect. Some entrepreneurs believe sponsorships diminish flexibility, though it's all a matter of perspective. When you have a solid budget that allows you to experiment with all sorts of branding and marketing strategiesThe CONs of Sponsorships
Every business decision might bring disadvantages that need to be acknowledged.Development of controversies
The presence of competitors might represent a severe problem for sponsors. If your company is being targeted by more sponsors, the decision that you'll make might create discrepancies between you and your current sponsors. Unfortunately, any discrepancy will negatively influence the company's reputation and the sponsee-sponsor collaboration.The lack of standardization
Regarding startup sponsorships, there needs to be more standardization for your business and the sponsor. First, the lack of organization might put you in conflict with the sponsor due to ineffective communication. Secondly, if the expectations are different, you will encounter issues at one point or another.No guaranteed returns
You can't objectively predict your returns when you include sponsorships in your startup plan. For that reason, it is critically important to ensure that your collaboration provides as many perks as possible.Research, Research, Research
Now that we've covered the PROs and CONs, we're ready to move on to the practical stuff. The first and most crucial step in getting sponsorship for your startup is research.Determine the Target Audience
Step one is simple. Just like you've defined your brand's target audience (future customers), you need to repeat the same process and seek the proper sponsors for your business.Begin by identifying brands and companies within your community and niche. Ensure that the companies that you're searching for are reputable and solid. At the same time, keep in mind that there should be a close link between your startup and the values and culture of the companies you will approach. Here are some ideas:
- Local corporations
- Branches of huge companies
- Local brands
- Local sports teams
- Local influencers/millionaires
When choosing a sponsor for your startup, you must aim for the right sponsor category. For example, if you had a kids' store, you should avoid seeking sponsorship from Prada. Nevertheless, a company that sells products or services to parents would be a much better choice.
Find Potential Partners
Finding potential partners can be done in many ways. First off, you should leverage your personal relationships and your professional network. Letting everyone know your new business seeking sponsorship might offer you unexpected opportunities.Here's a good idea:
After you're done defining your target audience, start looking for companies that are already sponsoring businesses within your niche.Research Individually
Each of the companies that you find must be carefully researched individually. Visit their physical stores, websites, and social media channels before making your first impression and deciding to get in touch.Make a List
Make a priority list. List the most relevant potential sponsors from top to bottom and note any pertinent details. Contact information, exciting notes, pitch ideas, and so on.Plan Your Pitch
Your sponsorship pitch must be well-thought-out, well-planned, and well-designed. To do that, you should carefully follow the following tips:Understand and Prioritize the Needs of the Sponsors
A sponsorship deal is a business deal meant to satisfy the needs and expectations of two parties. More straightforwardly, you and the sponsor must provide value to each other for your collaboration to be fruitful.Many entrepreneurs and startup owners need to remember the needs of their sponsors. Even though their value is significant, they often forget to consider it when asking for sponsorship conditions.
For example, if you're contacting a vast corporation and pretending to get many benefits in exchange for small local publicity, you'll hardly ever witness success.
You must always understand and prioritize the needs of the companies that you're about to pitch. If your pitch helps prospective sponsors feel that you've carefully done your homework, you'll significantly improve the odds of landing a significant contract.
Get Your Business Plan Ready
Besides the pitch, you must adequately prepare your business plan. You should have a business plan ready by now. If you don't, that is the first step you must take care of before pitching a potential sponsor.Almost every investor wants to see concrete things. They need to know how you plan to position yourself in the marketplace. They also need to see your objective projections to define their return on investment and make a decision.
The business plan is a simple yet essential description of your business.
- Who are you?
- What are your brand's values and principles?
- What are your brand's goals?
- Who is your target audience?
- Who are your competitors?
- What is your unique value proposition?
- What is the basic organizational structure of your company?
When a sponsor looks at your business plan, all these details should be present. Make sure to include financial projections for the next five years. If you need help creating a solid business plan, you can take advantage of a paper writing service and allow professional business writers to enhance the professionalism of your plan.
Craft an Executive Summary
An executive summary is a short text (200-300 words) that acts as a mission statement. The executive summary should tell:Details about the type of sponsorship you're seeking (short-term, long-term, event-based, etc.)
The reason why you seek this sponsorship
The main benefits that the sponsors will receive once signing the contractThe executive summary is very similar to a cover letter. It is the document that captures your prospect's attention and forges the initial impression.
Make your prospects feel that you've taken a lot of time to research their company before contacting them by personalizing each executive summary executive summary.
Send the Pitch and Follow Up
Your pitch should be comprised of the executive summary and the business plan. After getting everything ready, you should send your pitch to multiple prospects based on your established priority.After sending the pitch, you must follow up after a few days. Give it a week. You should expect your sponsors to wait to reply, as many will forget or neglect your offer by mistake.
Leverage Crowdfunding
If you're looking to raise significant capital, consider crowdfunding. Platforms like Kickstarter (and many others) are putting you in touch with many potential investors and sponsors.The biggest downside of crowdfunding is that you'll have to share a portion of your company with the investors who are putting money into your company. There are lots of PROs and CONs when it comes to crowdfunding. I highly recommend you do your research before deciding to crowdfund your startup!
